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Earlier this year, we were talking about some insight into the current electric car boom in the auto industry. Some consultant agencies think automakers have bit off more than they can chew with the battery-electric vehicle (BEV) boom, but sales for plug-in hybrids and BEVs have never been stronger. Furthermore, many, many companies and automakers are entering into joint ventures to deploy more charging stations in various countries, the United States included. IONNA is one of the latest to get approved to build new BEV charging stations in North America, and it might be the best time for any other automakers stalling out there with the recent drop in BEV battery materials costs.
That’s right. If anyone out there has been shopping for an electrified or all-electric vehicle in the last two years, they may be surprised to see the sudden drop in prices. The starting MSRP for plug-in hybrid electric vehicles (PHEVs) and BEVs has gone down tremendously. On the one hand, it could be because automakers are desperate to sell the models they’ve invested a lot of moola in. It could just as very well be thanks to the drop in the cost to producing electric vehicles. At first, PHEVs and BEVs were expensive because of how much it cost to make them – like any business. Once the first and expensive prototype is out the door, things simplify, improvements on design are made, what’s practical and what isn’t is examined, and then we have a new product that doesn’t cost a leg and a foot to make.
The falling prices allow automakers to maintain margins as they cut stickers "because you're paying less for batteries, but you make the vehicle more attractive for the end consumer…the automaker "could ultimately charge whatever they want, but they need to make a margin, and they need to stay in business and not go bankrupt at the same time." - Gabe Daoud, an analyst at TD Cowen
As prices decline for key materials to make BEV batteries, such as lithium, cobalt, nickel, and other materials, the race to make consumer-focused BEVs is back on. Automakers just don’t want to make BEVs that attract consumers, but also make them more practical, hence joint ventures like IONNA. Changing city infrastructure can take a lot of work, but we have the rest of the decade to contend with before large companies like Stellantis release all 75 of the new BEVs, according to their Dare Forward 2030 business plan.
Let’s take a quick look at some numbers. Lithium hydroxide is an important material mainly used to manufacture BEV batteries that feature high density and high capacity for producing more energy for a higher output (kilowatts). Back in 2022, Lithium hydroxide prices peaked at $85 per kilogram. That’s a pretty penny for anyone. In the first quarter of 2024 (although we still have another month for Q1 to end), the current price is sitting at $16 per kilogram. That’s a drop of more than 80 percent!
Companies like LG Energy Solution, General Motors, and even reigning champion Rivian have expressed their glee at the drop in costs to produce battery cells. Many automakers will benefit from this new change, and we know automakers like the Kia Corp will definitely be happy about it, having released several new BEV concepts in the last two years – the Kia EV6, Kia EV9, Kia EV5,and the Kia EV4 and EV3 concepts. Now is the best time to shop for a new BEV.
Want to get behind the wheel of your own BEV? Shop for a new car online with NowCar.